RSA may have won in the High Court over repair costs, but it does nothing for the industry’s reputation

Today’s High Court judgement in favour of RSA is a vindication for RSA boss Adrian Brown.

RSA’s reputation has been dragged through the mud after a Romford County Court judge ruled last September the company was fabricating add-on charges when repairing vehicles as the non-fault insurer.

RSA believed it is innocent and took it to the High Court judge.

In summary, the High Court judge has ruled that the loss should be determined by what a reasonable cost is and a reasonable cost should be determined by what the man on the street can get rather than insurer. On that basis, RSA’s action was not unreasonable.

That’s because RSA, even if they did add on extra charges, can get a better deal than the man in street as it has preferred supplier status with its partners.

Insurers can use their muscle to get cheap deals for paint in bulk, for example, something an ordinary punter could never do.

Added to the vindication of the verdict, RSA also feels it’s been unfairly lambasted as many others in the industry operate in the same way.

It’s a bit like referral fees: nobody likes it, but those companies that don’t do it too will lose money and end up being the victim.

Allianz, which opposed RSA originally, is launching an appeal. It argues that the judge’s verdict will inflate claims because it will allow these practices to continue.

Stepping back from this legal spat, what is clear as that it threatens to hurt the reputation of the industry as a whole.

The industry has suffered from the riot claims accusations, hiked motor premiums, referral fee debacle, OFT probe and now this.

The man in the street may not be able to get a better deal than insurers when it comes to repairing their vehicles, but that won’t stop him thinking that all insurers are rip-off merchants.